RI shares end lower, rupiah steady

RI shares end lower, rupiah steady

Dow Jones, Jakarta

Indonesian shares ended down Friday led by selling in Indonesian Satellite and Astra International, while rupiah ended steady, amid talk of central bank intervention to bolster the rupiah in the face of dollar demand from corporates.

They said overall sentiment was weak amid lingering concerns about a possible war in Iraq and an absence of fresh leads from the domestic economic front.

The Jakarta Stock Exchange Composite index ended down 0.4 percent, or 1.427 points, at 405.343, up from a low of 402.569.

Decliners led gainers 58 to 37, with 69 stocks unchanged.

Volume was 312 million shares valued at Rp 250 billion (US$28.4 million).

Indonesian Satellite lost 2.5 percent, or Rp 200, to Rp 7,800 on speculation that the company will issue rights to expand its business this year, and on growing expectations it will report lower earnings for last year due to declining international calls.

Telekomunikasi Indonesia lost 1.4 percent, or Rp 50, to Rp 3,500 on profit-taking after rising 0.7 percent Thursday.

Car-maker Astra International dropped 4.1 percent, or Rp 100, to Rp 2,350 on profit-taking after rising 4.3 percent recently.

Dealers said investors also sold cigarette blue chips on expectations the companies will report lower earnings this year due to a decrease in purchasing power after recent tariff hikes.

Cigarette-maker Gudang Garam lost 0.7 percent, or Rp 50, to Rp 7,450, and its rival, HM Sampoerna, was down 0.8 percent, or Rp 25, at Rp 3,300.

"Selling in blue chips was almost across the board," said a trader with Danawitta Securities.

He expects the main index next week may test the key support level of 400 points.

Meanwhile, the dollar closed at Rp 8,893, down just a touch from its finish Thursday at Rp 8,895.

Dealers said Bank Indonesia was suspected of selling dollars via state banks. The central bank has said it would intervene in the market to help the rupiah if necessary, although it doesn't confirm when it has actually done so.

Local companies continued to buy dollars, possibly to hedge dollar obligations maturing later this year, dealers said. Indonesian firms, saddled by around $60 billion in foreign debts, have been buying dollars since last week when the U.S. unit slid close to Rp 8,880.

Still, dealers said underlying sentiment toward the rupiah remains positive as offshore participants are still attracted by the healthy differentials between rupiah and dollar rates.

Indonesia seems to be growing more stable politically and that helps the rupiah too, dealers said.

"The dollar will slide again once demand from local companies evaporates," said a dealer with a foreign bank.

Dealers expect the dollar to trade between Rp 8,880 and Rp 8,900 Monday.